BY Fraser Tennant
For the second time in a year, no-frills pioneer Spirit Airlines has filed for Chapter 11 bankruptcy protection in order to facilitate a comprehensive restructuring and position the business for long-term success.
The airline intends to use the Chapter 11 process to implement the broad changes necessary to transition the company for a sustainable future and position it to deliver the best value.
The Chapter 11 process will provide Spirit with the tools, time and flexibility to continue ongoing discussions with all of its lessors, financial creditors and other parties to implement a financial and operational transformation of the company.
Through the restructuring process, Spirit intends to: (i) focus its flying on key markets to provide more destinations, frequencies and enhanced connectivity in its focus cities; (ii) optimise its fleet to match capacity with profitable demand in line with the redesigned network; and (iii) reinforce efforts to build on its industry-leading cost model by pursuing further efficiencies across the business.
“Since emerging from our previous restructuring, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future,” said Dave Davis, president and chief executive of Spirit Airlines. “After thoroughly evaluating our options and considering recent events and the market pressures facing our industry, our board of directors decided that a court-supervised process is the best path forward.”
Spirit expects to be delisted from the NYSE American stock exchange as a result of the Chapter 11 filing and for its common stock to continue to trade in the over the counter marketplace through the bankruptcy process.
“As we move forward, customers can continue to rely on Spirit to provide high-value travel options and connect them with the people and places that matter most,” continued Mr Davis. “On behalf of our board and leadership, I want to thank our team members for their continued dedication, resilience and commitment to delivering a safe, reliable operation and excellent service.”
Florida-based Spirit Airlines serves destinations throughout the US, Latin America and the Caribbean with its all-Airbus Fit Fleet, one of the youngest and most fuel-efficient fleets in the US.
Mr Davis concluded: “We have evaluated every corner of our business and are proceeding with a comprehensive approach in order to best serve our customers, team members and other stakeholders.”
News: Spirit Airlines files for second bankruptcy in a year as financial challenges persist